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Why The X-Box Network Will Fail

Posted by Hemos on from the battle-of-the-giants dept.

angkor wrote to us an article from The Register that looks at what Microsoft is planning for the X-Box Network. The factual information is educating on it's own - and the analysis of why they think it will fail is interesting as well.

28 of 442 comments (clear)

  1. lock you in by Jucius+Maximus · · Score: 5, Interesting
    It seems that this is conceptually similar to what they are trying with Windows Product Activation and the .NET subscription.

    They want you to get on the service and pay a fee per month. This way you are subscribed and you don't own the product. You are only "licensed to use it."

    The thing is that this is a proven profitable model. Look at Ultima online. It's pulling in a cool US$million every month with no signs of stopping. And Everquest is delivering on similar dreams of avarice.

    It seems to me like MSFT is trying to cash in in the same manner with using a proven business model.

    1. Re:lock you in by zerocool^ · · Score: 3, Interesting

      It seems that this is conceptually similar to what they are trying with Windows Product Activation and the .NET subscription.

      They want you to get on the service and pay a fee per month. This way you are subscribed and you don't own the product. You are only "licensed to use it."

      While this may be true in this case, you really have to think: There are lots of online gaming arenas that are free (battle.net), but they are completely within their right mind to charge a monthly fee for it. The monthly fee goes to cover the cost of the equipment, which is already sunk, plus the cost of bandwidth, plus probably to subsidize the connection thingie that you have to buy to get it to work.

      As far as I see it, the recurring income isn't a cause for M$ conspiracy theory, the question just remains that if sony can do it for free, how much better does M$'s have to be in order to convince people to pay for it. Plus they're going to have to sell a LOT of subscriptions in order to make money, and the making money will only be down the road (note there's no monthly fee until after the first year). Plus if this does push XBox sales, is that really a good thing? Is the XBox still being sold under cost?

      Now, per the slashdot usual, I have to point out that M$ doesn't NEED the money, blah blah, $40 billion dollars blah blah. Still, I don't see a problem with asking people to pay every month for a quality service that costs them money every month, in addition to having a large sunk cost.

      ~Will

      --
      sig?
    2. Re:lock you in by sheldon · · Score: 5, Insightful

      the question just remains that if sony can do it for free, how much better does M$'s have to be in order to convince people to pay for it

      But Sony isn't going to do it for free. Sony is just not going to do it. That is, all Sony is going to sell you on your PS2 is a modem/network adapter to allow you to connect to your pre-existing ISP.

      From then on, whether you play a game online or not is entirely dependent upon your relationship with the software publisher of the particular game. So in the case of playing Everquest, you will pay $10/month to Sony. If you want to play some other game from Sega, you will pay $10/month to Sega and so forth. Now some games may sell so well that the publisher includes online play in the price of the box, like Blizzard does with Diablo, but I suspect most won't be like that. There will either be a charge to get to the Sega network, or per individual title.

      So the Sony model is actually going to be far more expensive per month in order to get access to the same number of games as the Microsoft model. I think this makes the Microsoft model far more compelling from a consumer aspect.

  2. Potential Reason by briggsb · · Score: 5, Funny
    It could fail if the user base dwindles to 0 because of this accessory.


    Seriously, why are we so fascinated with failure. It's like some gossip rag that's so excited by some movie star getting busted for drugs.

  3. Apostrophes count by Anonymous Coward · · Score: 3, Insightful

    The factual information is educating on it's own.

    Sheesh. Would you dorks learn the difference between the contraction it's and the possessive its? "The factual information is educating on it is own" ? Thppft.

    1. Re:Apostrophes count by stang · · Score: 3, Funny
      In fact, this possesive [sic] form was correct until the 19th century.

      Thou art quite Correct; there if No need to change from the Claffic Formf of our Anceftorf. Efpecially when creating ftorief on the Front Page, any fort of grammer Shall be Deemed Appropriate and Valid ufage.

      Beesidez, d00d, if u cant talk the talk how d0 we know if u can walk the wak?!!!?

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  4. The fate of XBOX Live by dnaumov · · Score: 3, Insightful

    There are just 3 factors that will decide whether the XBOX Live Network will fail or not:

    1) The amount of playable games.
    2) The quality of the service (reliability, speed, etc).
    3) The price.

    XBOX does indeed have a very good amount of games coming, theres no denial for that. Unreal Championship is one, MechWarrior is another and more and more are being announced. However, the 2nd factor is what I think will decide the fate of this Network. If it's avaible to a lot of people, is relatively fast and is reliable, then you can count on a lot of people shelling out quite a lot for it.

    Yet somehow, I wouldn't count on the service actually being as reliable as they claim it to be.

    1. Re:The fate of XBOX Live by (trb001) · · Score: 4, Insightful

      There are just 3 factors that will decide whether the XBOX Live Network will fail or not:

      I disagree, I think there's at least a fourth. The thing about game consoles is, they're immediate. With the old Nintendo you put your cartridge in, hit the power switch and you were playing Mario Bros. in under 5 seconds.
      When the playstation came out, it had that stupid splash screen and took so long to load that you could run and get a beer, hit the bathroom and still make it back in time for the opening credits.

      If people want to play online computers games, they'll play them on the computer. Yes, yes, you'll have a certain percentage of the population that thinks computer games are stupid and only for the geeks. You'll also have the segment that really want to see how Halo does as a multiplayer game. It's kinda like the Star Wars phenomenon...even if every critic said the movie was a waste of time, you'd still have 100 people lined up opening night dressed as Jedis and Stormtroopers because they WANT to.

      Another item to consider is how updateable a game is. With computers, you download an upgrade, install it, you're done. But that's never been the idea behind game consoles. Games on game consoles were practically treated as hardware. They were physical objects that you could manipulate with your hands, making them much easier for non-abstract thinkers to handle. They were also standalone. Your copy of Duck Hunt was the same as his, and hers, and theirs. Now, you'll need to download patches onto the XBox hard drive in order to play games, a concept that was familiar only to PCs in the past and something that, IMHO, console gamers never wanted to deal with.

      Just my thoughts, but I kinda liked the idea of consoles games remaining consoles, disconnected form the world and FAST...Playstation made up for the speed with breakthrough graphics, but XBox is going to have to do one better, methinks.

      --trb

  5. no security? by jglow · · Score: 3, Funny

    Bech said the company was planning a service that he compared to Disneyland for its safe, wholesome environment - in contrast to the 'Coney Island' he said that the open Internet can sometimes become. 'Compare Coney Island to Disneyland,' he said. 'When you're at Disneyland, there's no trash, no violence and you never see security. That's what we have in mind.

    Come on... this is a gaming network, not a theme park.

    Kind of like a Microsoft OS, you never see security...

    --


    There's no "I" in Linux.. err..
  6. "Sony...has more sense and fewer scruples. " by wiredog · · Score: 5, Funny

    Fewer scruples? Than Microsoft? <Bill_And_Ted>Whoa</Bill_And_Ted>

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  7. Re:man.... by quantaman · · Score: 5, Insightful

    The reason we want it so fail is because we fear it. We fear it is because if it becomes the dominant consol you KNOW Microsoft is going to use it as a lever to force themselves more and more into the home, that's why MS cancelled WebTV, this is a stronger candidate for getting MS into the living room. Also consider that so far Sony and Nintendo have played relatively nicely in the consol market (from a consumer rights point of view), just look at MS's track record and decide wether you want that company controlling the consol industry too.

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    I stole this Sig
  8. We don't need no steenkin internet by rot26 · · Score: 5, Interesting

    This looks to me more like an end-run around the internet itself. It will essentially run in a tunnel through the existing infrastructure, but at some point in the future, there's no reason that they couldn't migrate on to something else, say a wireless network that had its own protocols, address scheme, etc. Bill Gates has been kicking himself in the ass for the last 10 years because he didn't discover the internet soon enough to dominate it, and he's got to be salivating at the idea of an essentially private user space that he controls lock stock and barrel. If he pursued this for all it was worth, he could do it with his other $39 billion... I wonder what kind of return on his investment he would eventually get?

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  9. Re:Big suprise by EvlG · · Score: 4, Insightful

    Except not everyone ones some all-in-one privacy intruding box from MS.

    I have a computer for email and web browsing.

    I have a Gamecub for games.

    I have a TiVo for PVR.

    Each of these devices does a particular task very well. Why do I need to combine these into one box that doesn't do any of the 3 tasks particularly well?

  10. Maybe it will maybe it won't by Aceticon · · Score: 3, Interesting

    It might fail, or it might not...

    Food for thought:
    1) Which is the strongest driving force for Console/Console-Accessories/Console-Games:
    a) Whinning kids.
    b) Grownups buying presents.

    This whole MS approach to selling a "clean" network for kids to play in will appeal to parents but not necessarily to the kids.

    2) Can/Will Microsoft buy legislation forcing ISPs/GameNetworks/etc... to "protect" children?

    If they get there first and then they buy the legislation, they will be first to market with a product designed to fit that legislation (actually it will be the legislation designed to fit the products, but in practice it's the same).

  11. Re:Big suprise by mfos.org · · Score: 3, Interesting

    Right, but what the Reg is trying to say is that Microsoft is failing in those attempts. And as for bad mouthing, even Nixon had the Washington Post

    Step 1 - X Box - is costing the company more money than they were willing to spend, and just isn't making the inroads against Sony that the hoped, and Nintendo is managing to hold its own.

    Step 2 - Live - I think the Reg did a good job detailing this. It looks like it'll cost the company even *more* money just to make people pick it up. It seems Microsofts hopes are pinned on a constant, viable, source of revenue. However, in the past these networks have failed, remeber MPlayer?

    Step 3 - Try launching an all in one home media station with two heavy weights in the PVR business, two heavy weights in the game business, and two heavy weights trying to cut off any useful service you want to provide (the MPAA and RIAA). Mix that with a strategy thats already hemoraghing money, and you've got a situation that just doesn't look that great for success.

  12. Observe the trends by Rupert · · Score: 5, Insightful

    While El Reg does love to bash Microsoft (one of the reasons I read it!) they also have a point here about the various companies different strategies for online gaming.

    MS is building a theme park, and will charge a toll for players and (probably) for game companies too. Sony is staying out of the expensive business of physically connecting game players to game servers, and instead letting the game developers provide the servers. If the history of the Internet so far is any guide, Sony's approach is more likely to succeed.

    --

    --
    E_NOSIG
    1. Re:Observe the trends by sheldon · · Score: 5, Interesting

      Setting up the online gaming infrastructure can be expensive. In the PC world there have been only a handful of success stories. Quake relied mostly on volunteers setting up servers. Blizzard is relying on sheer popularity of their boxed game sales to cover the cost. But others like UO, Everquest, and dozens of others charge $10/month to play.

      So Sony is leaving it up to the developers. Which means some games may be free to play online, and others will cost money.

      But the way game consoles work, a consumer buys many games and then might wish to play any given game at any time. This means that unless you are entirely committed to one game, you face the possibility of paying $10/month for half a dozen games, which is a signifigant cost. That means you probably only choose one game to play online, sort of a survival of the fittest. Everquest has become this way on the PC, whereas others like Subspace died from lack of subscribers.

      On the other hand Microsoft is taking a different tactic. They'll provide the infrastructure for all games. The developer of the game sells their box, and then turns over the server code to MS to maintain. MS in turn charges one price to the consumer(this might be $50/year, maybe it's $10/month, not sure yet) to access all games online.

      This means that popular games will drive XBox sales and sales of the online subscription. But less popular games will be able to share these infrastructure costs and as a result not disappear totally because they only have say 200 users instead of 200,000.

      I see Microsoft's model as clearly superior from the customer perspective. The only question is how much, if anything, they charge the game producers. If it's little to nothing, MS will clearly be in a better partnership position.

      BTW, Sony's model has been criticized by others a bit more knowledgeable and certainly less biased than the Register:
      http://news.com.com/2100-1040-855039.ht ml

    2. Re:Observe the trends by newbiescum · · Score: 3, Informative
      I keep seeing people post that you only pay a flat rate fee and you get access to all of X-Box's online games. Why is it that in some articles about X-Box Live, there's also a statement like the following:

      "Microsoft has committed to assisting publishers in the hosting, networking, security, and billing for their online games."

      That seems to suggest that there will be the possibility of additional fees for some games. Online RPGs for instance are now expected to be updated regularly with new items, quests, etc., and I imagine that a static world would mean the death of the game. Yes, people would love to not download patches that fixes features that should have been in the game in the first place. However, people also love the dynamics of the game where the weapon you had last week may have been the best, but the new weapon drops on such and such mob is even better.

      Back to the original point, who is going to pay for those updates, as these updates will certainly not be developed for free? That $10 a month will probably cover the bandwidth and matchmaking services, but it's doubtful it will help cover developer expenses, and if it doesn't cover their expenses, why bother making an online game? Sports games are suppose to update their statistics and rosters (injuries) as the real life season progresses for a more "realistic" game, so it's not only RPGs that would require developer maintaince. Let's say MS is generous and gives a portion of that $10 to developers. But what if gamers play more than one online RPG with more than one sports game? Then that $10 is split so many different ways that it becomes insignificant. And if developers have to pay for hosting at MS's datacenters, that is a recurring monthly fee for the developers possibly, and I doubt that the $50 you paid for the initial game can pay not only for the development costs of the game, but also the recurring monthly costs to be hosted by MS. I just don't think people should get their hopes up that this is a $10 flat fee.

    3. Re:Observe the trends by djbentle · · Score: 4, Informative

      All good points. I would add a few other things. One, Blizzard is a good example of why Microsoft's strategy may be more successful. Battle.net may be free, but it is also buggy, overcrowded, laggy, and infested with cheaters. Blizzard lacks either the ability, or the desire to fix these problems. With Microsoft's strategy there is one system to police and maintain. If it works well, all the games on it will work well. With Sony's strategy each game will be a crapshoot. Some companies will get it right, others will be abysmal failures whether they charge or not.

      Battle.net would not be successful on a console. There environment it too hostile for casual gamers. The console market is different from the pc market. PC online gamers are mostly hardcore gamers willing to fiddle with stuff to get it to work. Consoles like the playstation 2 are so successful (>30 million world-wide) precisely because they don't limit themselves to hardcore gamers. Microsoft's system will present one unified, homogenous, well maintained destination for all gaming. On Sony's system you will have to deal with 10 different companies and their separate bills, servers, interfaces, matchmaking systems and quirks. Plus, with the XBox you can find your friends and talk with them anywhere on the network, anytime, no matter what game they are playing.

      p.s. If you like subspace, it is far from dead. It is now called Continuum, but it is the exact same game. Check out www.subspacehq.com. That game ate my life when it was in beta years ago. It is a perfect example of a game that would have succeeded with Microsoft's system because they wouldn't have had to pay for servers. There are many great games that will never be popular enough to pay for the infrastructure investment necessary to make them online. The only way around this is user hosted servers (the common pc model) and this won't work with consoles.

      David

  13. Re:Big suprise by FatRatBastard · · Score: 3, Insightful

    Except not everyone ones some all-in-one privacy intruding box from MS.

    I'll go you one further: hardly anyone wants these type of boxes.

    Remember, Sony had the same vision for the PS2, which has been pushed back for the PS3. Plus, when it comes to a smart cable boxs you have do deal with cable companies, not the end users.

    How many people use thier Xbox as their only DVD player, CD player, MP3 player, etc? I'd wager not many (and those that do are cheap ass college students.. I know I would).

  14. Re:Big suprise by pubjames · · Score: 4, Insightful

    They don't realize that gaming isn't the only thing MS has planned for the XBox. MS, and many other companies, have always wanted an integrated home media box that does everything from check your email, to help you plan a grocery list, to play video games.

    The XBox is just the first part of the plan. Live is the second. Next, media boxes with interactive television.

    Then Microsoft will learn what many domestic electronics manufacturers learned years ago. That Joe Public does not want domestic electronics products that combine a number of different functions. That's why you don't find many combined TV/DVDs or TV/music systems or whatever. You can bet that, for instance, Sony doesn't think that the fact that the Playstation 2 can play DVDs is much of a threat to its DVD players - most people who want to watch DVDs will buy a player.

    I expect that Sony will have the good sense to concentrate on keeping the Playstation III a great games machine, and watch Microsoft experiment and screw up trying to add lots of other types of functionality to the Xbox II.

    I'm just off to make a cup of tea and some toast with my combined kettle-toaster...

  15. Re:Big suprise by imadork · · Score: 4, Interesting
    Big surpise this article comes from Register who has made it its sole purpose to badmouth MS.

    It seems to me that the Register has a habit of badmouthing everyone more or less equally. Also, looking over from my side of the world, it seems that (with the execption of the UK government) people in Europe seem much more wary of Microsoft than people in the U.S. do. I don't think the Reg goes out of their way to bash Microsoft like we do here on /., but sometimes it just happens.

    They don't realize that gaming isn't the only thing MS has planned for the XBox. MS, and many other companies, have always wanted an integrated home media box that does everything from check your email, to help you plan a grocery list, to play video games.

    On the contrary, if you actually read the article you'd know that they have more planned, even if the Reg doesn't spell out what those plans might be -- they have more server capacity planned for Xbox Live than they currently do for microsoft.com, after all. Quotes from MS Execs indicate that Microsoft wants to serve the PG, sanitized, "Disneyland" version of Media on its network. The Reg's claim is that it's doomed to failure, because in order to do this with any effectiveness, you're going to have to build your own separate, parallel network, and populate it with your own sanitized content, which you then have to police for violations of your sanitization policies. When the inevitable violations occur, and occur frequently, people lose confidence in your sanitized network, and your main differentiating feature is now gone.

    The only people who come close to pulling off a separate network is AOL, who built their "gated community" before the Internet caught on, and permits access to the Internet-at-large, so it isn't really a separate network. AOL can police its own content, but not the Internet-at-large.

    You could debate with the Reg's claim, but it seems legitimate to me.

  16. Interesting? Hardly... by stubear · · Score: 3, Informative
    The factual information is educating on it's own - and the analysis of why they think it will fail is interesting as well.


    Factul information? Where? Interesting? About as interesting as your commentary Hemos. You should get out more if you thought that article was enlightneing and factual.
  17. microsoft != microsoft by sluggie · · Score: 5, Insightful

    Yes, it's true.
    Just because they developed a kinda unfriendly OS there is no reason to hate the whole company and predict failings and spread bad mood.

    The gaming sector of Microsoft has nothing in common with the part of the company that produces the OS, except the name.
    Take a look at Microsoft hardware, the controllers, the joysticks, the mice. They deliver rock steady quality for a fair price.

    And I think it's the same thing with gaming here. The guys responsible for that DO have the balls and the money to pull this thing off.

    Why do we always have to bitch about EVERYTHING that MS does? Why can't we just be grateful that they give us more freedom in choosing our online/gaming console?

    More drivers just improve the quality of the race.

    So, let's see how they do, and hey, if it's cool don't be ashamed to use it.

  18. Strength and Weaknesses by alen · · Score: 4, Interesting
    Microsoft's partners will be LucasArts of course and a bunch of small developing houses that don't want to invest tons of $$$ they don't have into their own datacenters. Since they don't have the cash they will be too happy to let MS handle the server side. Powerhouses like EA know all to well what happens when you give some control to MS and since they have the cash they can build their own datacenters. And most likely they already have some kind of infrastructure in place for PC gaming online. Why cede control to MS when you can write a soccer game and have PC players and X-Box players play on your own network? The downside to the Sony approach is multiple billing. With MS you have one bill for all your gaming needs. With Sony you have to worry about budgeting and if you can afford a fifth subscription. And if you already have subs to some online games will you want to set up more? With MS you have one account you can use for all the games you want.



    As far as kids tehy have their own credit cards these days and will be able to set up their own online accounts. So parents may be out of the picture in some households.

  19. Why is everyone missing the point? by donnacha · · Score: 5, Insightful

    I'm amazed that I have yet to read a single article that draws together the most obvious strands of Microsoft's Xbox strategy.

    1. It has nothing to do with the old razors/blades chestnut, whereby companies exclusively focused on gaming subsidized the hardware in order to make money on the software. Most commentators are so dazzled at their own brilliance in understanding that rather simple business strategy that they've failed to notice that the market has moved on, increased it's complexity and now has substantially expanded ambitions.

    2. MS might be saying that their only focus is gaming but you'd have to be retarded to believe it. Their major international investments in cable companies make it obvious that some sort of Personal Video Recorder and possibly also basic decoder capability will work it's way into the next Xbox.

    3. The current iteration of the Xbox is all about establishing it's credibility as a consumer device. They will achieve this because they have to and that sort of acceptance absolutely CAN be bought. I'm not saying that MS would madly throw money at this regardless of eventual profit but you have to realize that the eventual market they're aiming for is FAR larger than gaming.

    4. Apart from PVR, Gaming, DVD and cable TV decoding, there's also the fact that the Xbox will be the hardware incarnation of MSN Messenger and THAT'S the biggest game in town. An often overlooked part of their upcoming online gaming package is the headset communicator that they're bundling with it. Stated purpose of this device: to allow gamers to lambast eachother while playing. Actual purpose: to allow millions of people to chat. THAT's why they're building data-centres with such massive capability. Think about it, they become the world's defacto IM service with no Yahoo or AOL to compete with them.

    Let me just make this clear: the Xbox is going to be the world's telephone/watercooler/flirtation device. Your sister will buy one.

    The proof: MS aren't going to reduce the Xbox's retail price any further but, by Xmas, they WILL add the headset communicator and a years subscription to the bundle. Seriously, this will happen.

    Next, expect to see the introduction of a non-gaming based chat service by next summer.

    5. MS don't have to keep lowering the Xbox price. In fact, a major sales channel that Sony and Nintendo don't have is the cable companies. Expect to see the Xbox offered as a rental item, for about $15 per month along with Xbox Live subscription and stripped-down broadband Internet Connectivity (i.e. Xbox only).

    I'm not for or against MS, I'm just calling it as I see it. Personally, I might buy a GameCube when Pikmin is released. I might also buy an Xbox when it's functionality stretches, as I've predicted, beyond just gaming.

  20. Re:M$ by tommck · · Score: 3, Informative
    The only way M$ will dominate the market is by a pyric victory, they will have to spend so much money it just isnt worth it in the end.


    You know.. I congratulate you for using this word, and for using it correctly! But, I think people would be more impressed if you spelled it correctly :-) It is "Pyrrhic", not "pyric".

    Your thoughtful spelling police..

    T

    --
    ---- It puts the lotion on its skin or else it gets the hose again. It does this whenever it's told.
  21. Re:man.... by Manitcor · · Score: 3, Insightful

    Console systems play nice???

    Console gaming is one of the most cutthroat industries out there. If you think Nintendo and Sony play nice then you're kidding yourself. The difference is that Nintendo and Sony and the others have great PR control so you rarely hear about how crazy the market is.

    Honestly MS may be big and bad in the PC market, but I don't think they know thing 1 about the console market. They are also entering a market against competitors that have an entrenched user base and long term publishing agreements. Plus they have very deep pockets as well.

    I don't see Nintendo or Sony giving this market up without a massive battle. They have all the cards and MS is the young upstart and they have to learn the entire industry from scratch. They've already managed to piss off EA, big mistake.

    MS may fly or MS may fall but whatever the outcome I think we are going to see some serious sparks fly.

    --
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